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It's a make-it or break it time for retailers. The holiday selling season is always a critical time for retailers, but this year this may be even more true. With several retailers already falling victim to a drop in consumer spending, and filing for bankruptcy, retailers will be navigating through some tricky waters. Consumers are strapped for cash due to high energy and food prices, and unemployment is rising. The recent credit crunch has made it more challenging for retailers and consumers to borrow.

This blog will look at the winners and losers in the retail space. Who has the right strategy to capture consumer dollars? It also will look for trends in consumer spending and how that will impact the economy.

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Nov.20

3:01 PM ET

Thursday, 20 Nov 2008

Free Shipping—Pfff. Try 70 Percent Off!

Posted By:Cindy Perman

Topics:e-commerce | Economy (U.S.) | Consumers

Sectors:Personal and Household Goods | Retail

Not only are shoppers hitting the mall less frequently, they’re also hitting the computer less frequently this holiday season and that has e-tailers pulling out all the stops — before the turkey even hits the oven.

CNBC.com

Online spending grew just 1 percent from a year earlier, according to e-commerce tracker comScore.

“We’ve never seen anything like that,” said comScore Chairman Gian Fulgoni.

Indeed, that 1 percent is the lowest on record and a far cry from the peak of 28 percent in August 2007.

Forrester Research projects this holiday season will be the first in which online sales growth slows.

“I think for a lot of these retailers, the end of September and early October was a huge shock. It was like a dislocation … the consumer just stopped spending,” Fulgoni said. “I think that’s when everyone realized they had to treat this season very differently.”

Free shipping used to be the big promo Web shops used to lure shoppers — especially at this point in the season. But consumers have come to expect free shipping online and this year, it’s going to take a lot more to get rattled shoppers to pry open their purses.

Already we’re seeing e-tailers offering 20 to 50 percent off — sales that typically don’t start until Black Friday, the day after Thanksgiving — and even 70 percent off of certain items.

Smart Bargains.com is offering at least 60 percent off on everything from cashmere to diamonds and holiday décor. Ann Taylor [ANN Loading... () ] has also gone to 60 percent on many items.

Tips for Surviving the Holidays:

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Home for the Holidays: Getting The Best Deals

Kohl’s [KSS Loading... () ] is offering free shipping plus 20 percent off $100 or more, splashing the coupon code on its home page — so you don’t even have to leave leave their site to search for a coupon. It’s also got a section called “Gifts that fit your budget beautifully” and is offering one-day online promos such as 70-percent off imitation diamond jewelry.

Macy’s [M Loading... () ] has slashed prices by 20 to 50 percent and is offering special online-only “Web busters,” a play on in-store doorbusters, with discounts up to 70-percent off.

Plus, they’re getting creative.

In addition to its signature red-box items, which are discounted about 50-percent off, JCPenney [JCP Loading... () ] is offering an online signup for a Black Friday wake-up call to make sure you snap out of your turkey coma and get to their store by 4 a.m. for the doorbusters the day after Thanksgiving.

Sears [SHLD Loading... () ] and Kmart have up to 70-percent off on some items and, if you sign up for their emails, they’ll send you $10 in coupons. And Kmart has a special “Holiday Hunt” feature, where it’s hidden special deals throughout the site.

Plus, Fulgoni says, several of the multichannel retailers, who have brick-and-mortar shops as well as a Web site, are also pushing the option of buying online, pick-up in store, which allows shoppers to avoid the mall crowds.

Sears takes that a step further, offering shoppers an opportunity to text in their orders by cellphone.

Wal-Mart [WMT Loading... () ], which has been the biggest beneficiary of the downturn with its everyday low prices, plays to its strengths. At the bottom of its homepage, it has a running tally, a la the national debt clock, of how much it's saved shoppers since Jan. 1. At last glance, it was around $255 billion!

Zales’ [ZLC Loading... () ] clearance section aims to dazzle shoppers with its math: “Online only, take an extra 30% off. Prices already reduced up to 70%.” Plus, they’re offering a holiday sweepstakes online, with a chance to win a $5,000 airline gift card, a 2-carat diamond ring or $102,000 in cash.

The sweepstakes tagline is: “With this ring, I thee wow.”

More like, with this promotion, I thee wow!

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